Synopsis:
Tata Communications has gained attention following the announcement of a strategic alliance with AWS to construct one of the biggest AI-ready networks in India.
Shares of one of India’s leading telecommunications companies, part of the prestigious Tata Group, are in the spotlight after the announcement of a strategic collaboration with Amazon Web Services (AWS).
With the market capitalization of Rs. 49,469 crores, the shares of Tata Communications Ltd were trading at Rs. 1,735, down by 2.17 percent from its previous day’s close price of Rs. 1,771.20 per equity share.
What’s the news?
Tata Communications, in collaboration with Amazon Web Services (AWS), is building one of India’s largest AI-ready long-distance networks to support generative AI and cloud innovation. This high-capacity, resilient national network will connect AWS infrastructure in Mumbai, Hyderabad, and Chennai, creating a strong backbone for AI and machine learning workloads across the country.
The network is a new deployment with no existing capacity and will span 18,000 km with a capacity of 7.2 Terabytes per second. It is anticipated to be finished by the end of FY2025-26. With an estimated investment of Rs. 430 crore the project represents a significant infrastructure milestone for Tata Communications in terms of bandwidth and scale.
About the Company & Others
Tata Communications, originally incorporated as VSNL in 1986, came under Tata Group’s control in 2002 following the Government of India’s disinvestment. Tata Communications is a prominent global enabler of the digital ecosystem, with a global infrastructure and a significant presence in emerging markets. With partnerships with 300 of the Fortune 500 companies, it offers cutting-edge managed solutions to global corporations and service providers. Its offerings include communication, collaboration, cloud, mobility, connected solutions, and data center services.
The company’s revenue for FY2024–2025 increased by 11.18 percent year over year from 20,785 crores to Rs. 23,109 crores. Net profit saw a sharp increase of 89.38 percent, from Rs. 970 crores to Rs. 1,837 crores.
At the moment, the company’s P/E ratio is 47.4x as compared to its industry P/E 50.5x, and its ROE and ROCE are 55.2 percent and 14.8 percent, respectively. The D/E ratio of the company stands at 4.09. This shows the company’s strong financial performance and high leverage.
Written by Akshay Sanghavi
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